Dáil Éireann - Volume 414 - 17 December, 1991

Ceisteanna—Questions. Oral Answers. - Employment Opportunities.

1. Proinsias De Rossa asked the Taoiseach if, in regard to the speech he delivered to a Cairde Fáil dinner on 28 November 1991, he will outline the new possibilities which he indicated the Government were considering to make a major impact on the level of unemployment; and if he will make a statement on the matter.

2. Tomás Mac Giolla asked the Taoiseach if he will outline the recent discussions which he has had with employer organisations regarding the possible introduction of new employment and training schemes; if he will further outline (1) the way schemes will work, (2) the number of persons likely to be involved and (3) the cost, if any, to the Exchequer; and if he will make a statement on the matter.

3. Mr. Spring asked the Taoiseach the arrangements, if any, he has made to meet personally with the trade union leaders to discuss the implementation of the Programme for Economic and Social Progress; and if he will make a statement on the matter.

4. Proinsias De Rossa asked the Taoiseach if he will outline the matters discussed at his meeting with representatives of the Irish Congress of Trade Unions on 13 December to discuss the Programme for Economic and Social Progress; the progress which was made with regard to the agreement on the implementation of his commitments contained in the Programme for Economic and Social Progress; and if he will make a statement on the matter.

The Taoiseach: I propose to take Questions Nos. 1 to 4 together.

[1728] The measures by the Government I referred to on 28 November 1991 to reduce the level of unemployment were formulated in the context of current discussions with the social partners on the Programme for Economic and Social Progress. These were detailed in the appendices to the Government statement which issued after the meeting between myself and Members of the Government and representatives of the Irish Congress of Trade Unions on 13 December 1991.

The proposals in question include training and employment schemes, covering 25,000 persons on the live register, which would be financed by contributions from the European Social Fund and from contributions from employers. These proposals were also discussed at a meeting which the Minister of Labour and I had with the employer organisations on 25 November 1991. The commercial banks have also agreed in discussions with the Government to two new initiatives by them to create employment. The first involves the provision of £15 million in funds to provide loans for the creation or development of small and medium businesses with employment potential and the other their participation in a new commercial task force on tourism to identify new commercial measures to enable the tourist industry achieve its full potential in the international tourist market. All the measures outlined involve no costs to the Exchequer.

Other matters discussed at the meeting with the Irish Congress of Trade Unions included the budgetary outlook for 1992, tax matters — with particular emphasis on measures to collect tax arrears and deal with tax evasion and avoidance — and public service pay.

Copies of the statements which issued after the meetings with the employer organisations and the ICTU have been placed in the Oireachtas Library.

Proinsias De Rossa: First I should like to ask the Taoiseach what is the cost of the employment scheme and what is the cost of the training scheme. The Taoiseach has indicated that there is no cost to the Exchequer, but can he say in what [1729] way the schemes will be funded and also how many are involved in the scheme? He indicated that 25,000 people will be taken off the live register. Is that number additional to the number already promised in the Programme for Economic and Social Progress in regard to the possible creation of 40,000 jobs over the period of the programme, or is it part of that promise?

Would the Taoiseach agree that it would be much better from the point of view of creating sustainable jobs that money available — whether from the private sector, the public sector or Europe — be used in a more particular way by specifying industries that would be targeted for development, rather than following a blunderbuss approach and simply scattering money on make work schemes that will not be used——

An Ceann Comhairle: May I plead with the Deputy not to submit so many questions?

Proinsias De Rossa: I am about to conclude, a Cheann Comhairle.

An Ceann Comhairle: Questions should be brief and succinct.

Proinsias De Rossa: The employment schemes have been used by employers to gain cheap labour——

An Ceann Comhairle: The Deputy is making a statement now.

Proinsias De Rossa: ——and to dislodge permanent staff already employed.

The Taoiseach: I did not think that anyone could possibly find fault with this new scheme. First I should like to say that the scheme does not involve any cost to the Exchequer. The scheme is estimated to involve about £100 million in all. Twenty-five thousand people will be taken off the live register — 15,000 for employment and training and 10,000 for training. The cost will be met from European funds to the extent of 75 per [1730] cent and from the employers concerned to the extent of 25 per cent.

This is a scheme in addition to what is already proposed in the Programme for Economic and Social Progress, it is a new scheme. As I said, the idea is that 25,000 people will be taken directly off the live register. The people to be employed under the scheme must be on the live register and they must be taken into employment by business and commercial firms, who will be responsible for them.

The scheme could not be more directly targeted. Employers have indicated their support for the scheme. The proposal is based on individual firms and companies taking on additional employees. There will be no question of displacing existing employees.

Mr. Spring: In relation to Question No. 3 and the meeting between the Taoiseach and his Ministers and the Irish Congress of Trade Unions on Friday last, can the Taoiseach explain to the House why the Government have decided unilaterally to declare redundant the terms of the Programme for Economic and Social Progress? Why should the Government not negotiate with the Irish Congress of Trade Unions on the public pay terms of the agreement and does the Taoiseach not consider that the Government's action will lead to industrial chaos?

The Taoiseach: The Deputy is raising a separate matter. I understand that there is a Special Notice Question down to the Minister for Finance on that aspect.

Mr. Spring: May I ask the Taoiseach——

The Taoiseach: These questions are directed to statements made by me on 28 November 1991.

Mr. J. Bruton: It is Question No. 3.

Mr. Spring: Question No. 3 is specifically in relation to the meeting held last week.

[1731] The Taoiseach: In any event, the position is, as explained by me and by the Minister for Finance on a number of occasions that the state of the public finances leaves us with no alternative but to decide on the proposals we put to the trade union movement. Had the Government not taken any action along those lines there would have been an extra £350 million provided for public service pay in 1992, that is an increase of 10 per cent on what is provided in 1991. Those figures just could not be accommodated. It was necessary for the Government to decide as we did and to put the arrangement to the trade unions for acceptance.

I might add that the proposal, the arrangement, having regard to the circumstances, is very balanced and, in the view of the Government, reasonable. I would direct the attention of the Deputy particularly to the fact that it makes special provision for the lower paid in the public service.

Proinsias De Rossa: On Questions Nos. 1 and 4, in relation to the employment scheme proposed, what levels of pay will employers participating in the scheme be obliged to pay? Will they be obliged to pay more than the sum provided by the European Social Fund? Can the Taoiseach indicate what will be the level of subvention by the ESF per person participating in the scheme? Furthermore can he indicate what will happen when the particular fund ceases, when the money allocated for this scheme expires? Will a further scheme be implemented or in what way will this add to the general productivity in this State in terms of industry? My final question relates to Question No. 4 and the Programme for Economic and Social Progress: can the Taoiseach explain why a commitment has been given in relation to the special pay awards, that they would be paid in full in 1993 with full retrospection while, at the same time, those people entitled to the 3 per cent, the low paid, are being limited to a £5 increase with no guarantee that the balance to which they may be entitled will be received in 1993 or that they will get retrospection?

[1732] An Ceann Comhairle: That should be adequate, Deputy.

Proinsias De Rossa: A Cheann Comhairle, I am anxious not to engage in cross-fire with you——

An Ceann Comhairle: The Deputy's questions should be brief, relevant and succinct.

Proinsias De Rossa: A Cheann Comhairle, we are dealing with four questions. I am endeavouring to be as brief as possible to enable other Members to get in. If you will allow me complete my question, I will sit down and that will be it.

An Ceann Comhairle: This important matter may be adverted to in the Estimates debates tomorrow and Thursday.

Mr. Quinn: We will not get any chance of a reply.

Proinsias De Rossa: In that debate we will not get the specific answers I am seeking. Will the Taoiseach say what confidence we can have that the commitment for 1993 will be met and what arrangements are being made to meet the entitlement of those not classified as “specials” under the Programme for Economic and Social Progress?

The Taoiseach: The Deputy is confusing two entirely separate matters here. One is the question of the new scheme to take 25,000 people off the live register at no cost to the Exchequer. In reply to the Deputy's question on that matter, the employers will pay the normal rate for the job. There will be a subsidy given to them of £54 a week from the Social Fund. The scheme will last for 12 months——

Mr. Rabbitte: It must be a very low wage if they are subventing 25 per cent——

The Taoiseach: No, it does not matter what is the rate——

[1733] Mr. Rabbitte: ——and 75 per cent of it is £54.

The Taoiseach: It does not matter what is the job, it will be paid at the normal rate. The subsidy will be £54, and £18 of what the employer pays will be regarded as a contribution to training but 25,000 people will be taken off the live register and employed for a period of 12 months. There is a stipulation in the scheme that employers must retain them for a further six months. I cannot see how anybody can fault this scheme. It is a specific initiative to take people off the live register which we all agree is at an unacceptable level. It will be a tremendous achievement if we can get 25,000 people off that live register into normal employment at no cost to the Exchequer.

In regard to the other matter, there is a question tabled to the Minister for Finance about the public service pay arrangement. I suggest that we leave that so that Deputies can ask whatever questions they wish on that particular question.

Mr. J. Bruton: Would the Taoiseach agree that the Government entered into the pay commitments in the Programme for Economic and Social Progress, referred to Question No. 3, freely, with full knowledge and with their eyes open?

The Taoiseach: Is the Deputy talking about the Programme for Economic and Social Progress? Yes, the Government entered the Programme for Economic and Social Progress but what I thought was common knowledge was that the commitments given in the Programme for Economic and Social Progress were made on the basis of certain rates of growth being achieved. It is now clear that those rates of growth will not be achieved. In the circumstances, the Government, as they are perfectly entitled to do under the Programme for Economic and Social Progress, have sought revision of the public service pay commitments.

[1734] Mr. J. Bruton: In regard to the proposed 25,000 jobs scheme, is the Taoiseach aware that, when he discussed that scheme with President Delors and received a favourable response, that response was given by President Delors specifically in the context of a consensus approach to solving Ireland's employment problems and stated to be such? Is the Taoiseach aware that the action taken by the Government, in unilaterally walking away from an agreement, however unwisely entered into, will damage that consensus approach and perhaps also damage the EC Commission's support for the jobs scheme?

The Taoiseach: I am not so aware. I do not think those sorts of comments are very helpful. In my conversations with President Delors, I have secured support for this scheme. I am certain that that support will be forthcoming.

Mr. J. Bruton: On the basis of a consensus approach.

Mr. Rabbitte rose.

An Ceann Comhairle: I am calling on Deputies Spring and De Rossa for final brief, relevant questions. I will facilitate Deputy Rabbitte but I might remind the House again that Members will have an opportunity of discussing this issue on the Estimates for Public Departments both tomorrow and Thursday. Clearly there can be no debate now.

Mr. Spring: A Cheann Comhairle, you must appreciate the value of having responses from the Taoiseach to this House as opposed to Estimates debates.

An Ceann Comhairle: The Chair has permitted quite a number of questions.

Mr. Spring: In putting my final supplementary question perhaps I should remind the Taoiseach that he has come before this House on many occasions, claimed credit for his relationship with [1735] the trade union movement and the negotiations he conducted with the social partners. May I now put it to him that his action in recent days — the unilateral action taken by the Government — will damage any relationship built up with the social partners? At this late stage, would the Government not reconsider — if they have to renegotiate — negotiations and try to bring about consensus in relation to pay?

The Taoiseach: The experience built up over the course of the two programmes has been very valuable. I have said on a number of occasions that we would like to avail now of the goodwill created between the social partners on those occasions. The Government have not taken this decision lightly. It is not a decision of which we are particularly fond but, unfortunately, the public finances leave us no alternative. Could Deputies see the Government undertaking a burden of £340 million extra in 1992, an increase of over 10 per cent in public service pay, when growth in 1992 will not reach the levels we expected, when the cost of living is anticipated to be somewhere around 3.5 per cent? It is not feasible for us to do it and we have no alternative——

Mr. J. Bruton: The Taoiseach could give up his job.

The Taoiseach: ——but to go to the trade unions, explain the position in detail to them and seek their acceptance of this arrangement.

Mr. J. Bruton: Is it not the case that the Fine Gael Party told the Taoiseach at the time that this would happen and that he ignored them?

An Ceann Comhairle: I am calling Deputy Rabbitte on a final supplementary, and then Deputy De Rossa.

Mr. Rabbitte: May I ask the Taoiseach how he can speak about goodwill when [1736] the trade unions representing public service workers throughout the country are making arrangements to ballot for industrial action? May I specifically invite him to respond now in the House to the prospect of wholesale industrial action throughout our public services? Finally, may I ask him again to clarify what he means by inducing 25,000 persons into what he calls normal employment if it is going to be subvented at the rate of £54 per week? What does he roughly envisage-having regard to a 75 per cent — 25 per cent breakdown — will be the normal wage?

The Taoiseach: Employers will pay the normal rates. The contribution from the Social Fund will be £54 per person. The figure will not be 75 per cent in every case, but we anticipate the overall proportion of finance for the scheme will be 75 per cent. With regard to goodwill, I believe there is an enormous amount of goodwill existing between this Government, the trade union movement and the social partners. We regret we have had to put this arrangement to the trade unions and we hope that in time when they consider it they will find it acceptable. There is no other way the Government can approach the budget for 1992.

Proinsias De Rossa: I wonder if I misunderstood the Taoiseach's first response to my question with regard to the 25,000 people. Are there two schemes or is there simply one scheme? Is there an employment scheme and a training scheme?

The Taoiseach: I have already said there are two schemes.

Proinsias De Rossa: How many will be taken in under the employment scheme and what rate of pay will apply?

The Taoiseach: There will be 15,000 taken in under the first scheme and 10,000 under the second. I have already told the Deputy that.

Proinsias De Rossa: The Taoiseach tried to create confusion when I asked [1737] specifically about the rate of pay that would apply under the employment scheme by proceeding to talk about 25,000 people being taken on.

An Ceann Comhairle: I am moving on to the next Question.

Proinsias De Rossa: I am trying to clarify information the Taoiseach is giving to the House. As we know, the Taoiseach is not all that forthcoming at times in clarifying his position. What rate will employers be obliged to pay those who take jobs under the employment scheme? How much will come from the ESF and how much from the employer?

An Ceann Comhairle: Please, Deputy, let us have finality.

Proinsias De Rossa: We are supposed to be seeking information and I am about to conclude. How much will be available for the training scheme? How many will be taken on and by whom? How much will come from the ESF and how much will come from elsewhere?

The Taoiseach: I suggest that the Deputy do his homework. All these figures were published——

Proinsias De Rossa: I am asking the Taoiseach to give that information to the House.

The Taoiseach: ——by way of statement after the meeting.

Proinsias De Rossa: I want the Taoiseach to put this information on the record of the House.

The Taoiseach: The Deputy did not take the trouble to read the statements put out by the Government. It is all in them.

Proinsias De Rossa: Will the Taoiseach put it on the record of this House and treat this House with some respect?

The Taoiseach: I am treating the House [1738] with the utmost respect, as I always do, but the Deputy is refusing to acknowledge that this information has already been given by the Government publicly.

Proinsias De Rossa: The Taoiseach attempted to confuse the issue.

The Taoiseach: I will repeat the information but the Deputy might at least read the documents on this matter.

Proinsias De Rossa: The Taoiseach might at least answer questions when he is here to do so.

The Taoiseach: I will answer questions, but the information has already been given. There are two schemes. One is an employment scheme involving 15,000 people and another is a training scheme involving 10,000 people. In regard to the employment scheme, the employers will pay the normal rate for the job, whatever it is, and the subsidy from the Social Fund will be £54. The employer will be expected to take the person off the live register and employ him or her for a period of 12 months which will be subsidised and for a further six months which will not be subsidised. The training scheme will cover 10,000 people who will be taken off the live register. They will be trained for 12 months and given a certificate at the end of that period. The training will be approved by FáS or CERT. The training allowance will be £65 a week on average. Of that sum the Social Fund will pay £48.75 — the 75 per cent to which I referred — and the employer will pay £16.25, or 25 per cent.

Mr. J. Bruton: Would the Taoiseach agree that the Fine Gael Party advised the Government when the Programme for Economic and Social Progress was introduced that the financial targets on which it was based could not be achieved, as has proved to be the case? Would the Taoiseach agree that the Government's error in this matter has undermined the faith of their employees in the competence and almost in the integrity of the [1739] Government, with very serious long term consequences?

The Taoiseach: I do not agree. I remind the Deputy that the commitments in the Programme for Economic and Social Progress on all fronts, pay and everything else, were on the basis of certain rates of growth being achieved. The Deputy will recall that I stated quite clearly on the day we announced the Programme for Economic and Social Progress that if the rates of growth were not achieved we would all have to go back to the drawing board. I made that statement very specifically on the day we announced the Programme for Economic and Social Progress. It was all based on certain rates of growth in the economy. The unfortunate position is that we are not reaching those rates of growth and we have had to go back to the drawing board. We have had to go to the trade unions, explain everything in detail to them, give them an outline of the financial situation which confronts us in regard to the forthcoming budget and ask them to accept the arrangement we are putting before them.

Mr. Rabbitte: Post hoc.

The Taoiseach: It is in my view a balanced arrangement which looks after the lower paid and gives them the 3 per cent in full and undertakes to pay the “specials” due in 1992 fully in 1993, with retrospection to 1992. In the very difficult budgetary circumstances which confront the Government the offer we put before the trade union movement is a fair and reasonable one.